2004 (3) TMI 486 - AT - Customs

Summary

Issues:
- Applicability of limitation provisions under Section 27 of the Customs Act to a claim for refund of interest paid under Section 61(2) of the Act.

Analysis:
The case revolved around the question of whether the limitation provisions under Section 27 of the Customs Act are applicable to a claim for refund of interest paid under Section 61(2) of the Act. The appellants imported raw materials that were in-bonded on a specific date and cleared out for home consumption within the interest-free warehousing period. The appellants filed a claim for refund of the interest paid under Section 61(2) as the goods were not in the warehouse beyond the prescribed period. However, both the original and first appellate authorities rejected the claim as time-barred, leading to this appeal.

The Counsel for the appellants argued that the duty of customs under Section 61(2) is distinct from the interest payable on customs duty under other sections. The Counsel relied on a previous decision to support the argument that no interest was leviable on the goods cleared within the one-year warehousing period, making the interest paid refundable. The Counsel contended that Section 27 of the Customs Act, related to limitation provisions, was not applicable to the refund claim under Section 61(2).

On the other hand, the DR defended the rejection of the claim by stating that the claim exceeded the prescribed six-month period under Section 27. The DR distinguished the cited case by highlighting the dutiability of the goods in the current case. The appellants' mention of Section 27 in the refund application was deemed as invoking the provision, making it applicable despite the appellants' attempt to argue otherwise.

The judgment analyzed the arguments presented and concluded that Section 27(1)(b) applied to the refund claim of interest paid under Section 61(2) as the interest was a levy on customs duty. The contention that duty of customs was merely a measure of interest was dismissed, emphasizing that interest was a levy on duty. Therefore, Section 27 governed the refund of such interest, making the claim time-barred as it exceeded the stipulated six-month period. The appellants' attempt to disassociate from Section 27 was rejected, and the appeal was dismissed based on the sustained impugned order.